Preventing Employee Lawsuits

Lisa Sherman
California Labor & Employment Attorney

Question: "How can I prevent my employees from suing me?"

Answer: Sadly, in California, as in other states, you can't prevent anyone from filing a lawsuit against a Company or person at anytime for any reason, even if the employee is illegal or the claims are fabricated. However, seven steps employers can institute to reduce the risk can be remembered by the catchy pneumonic SHERMAN:

  • Severance and Full Release of Claims executed by the Employee is the most risk adverse way an employer can prevent future lawsuits, provided that the claims may be waived by the employee.  
  • Humanely handle the separation of employment. 
  • Employee Handbooks and policies are lawful, up-to-date, executed by employee, and consistently followed by the Employer. 
  • Respect Employees at all times. Often times, the "straw" that broke the camel's back is small and employees just want to be heard and treated with dignity.
  • Mindfulness at all times of employees' protected characteristics and viable claims, even if not the true reason for taking the action.
  • Analyze all Documentation to ensure non-discriminatory reasons for separation of employment are rock solid. 
  • Not respond when emotional. Always allow a cool-off time following the "final straw" to plan the separation meeting and carefully review the decision with employment counsel to evaluate risks, script how to communicate the decision with a witness present, negotiating severance, and review protection and return of all confidential information and employer property. 
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